Audit 325727

Finding No. 2023-004: Temporary Assistance for Needy Families Grant Claim Support (Federal Assistance # 93.558) Type of Finding: Significant Deficiency in Internal Control over Major Programs Criteria: Uniform Guidance indicates that that standards for documentation of personnel expenses are such that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: The Boys and Girls Club of Livingston County (the Organization) remits a variety of expense reimbursements to various agencies. We tested 13 bi-weekly timesheets and paystubs from 3 employees for the 6-month award period. The Organization incorrectly calculated the salary reimbursement for each month. This caused a net discrepancy of ($184) of total wages during the 6-month award period. Cause: The Organization functions with a small number of office personnel therefore, the Organization is unable to have a review of the requested reimbursement performed. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Questioned Costs: None Repeat Finding: No Recommendation: We recommend the Organization implement a policy to have an employee review the requested reimbursements and corresponding receipts to ensure they agree. Management Response: An increase of staff, a staff member and the CPA overview will be provided to ensure increased functionality for requested reimbursements and corresponding receipts verifying that each monthly reimbursement is balanced with the receipts and wages.

Finding No. 2023-005: Temporary Assistance for Needy Families Grant Claim Support (Federal Assistance # 93.558) Type of Finding: Significant Deficiency in Internal Control over Major Programs Criteria: Uniform Guidance indicates that that standards for documentation of personnel expenses are such that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: The Boys and Girls Club of Livingston County (the Organization) remits a variety of expense reimbursements to various agencies. We tested 8 bi-weekly timesheets and paystubs from one employee for the 4-month award period. The Organization incorrectly calculated the salary reimbursement for each month. This caused a net discrepancy of $99 of total wages during the 4-month award period. Cause: The Organization functions with a small number of office personnel therefore, the Organization is unable to have a review of the requested reimbursement performed. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Questioned Costs: None Repeat Finding: No Recommendation: We recommend the Organization implement a policy to have an employee review the requested reimbursements and corresponding receipts to ensure they agree. Management Response: The financial policies and procedures will be modified with the policy to include review of the submissions by the CEO and the CPA prior to submission of the grant reimbursement request, this will increase the ability to segregate the duties and provide more accurate reporting. Overall, with 2023 still coping with lack of employment pool coming off COVID, securing the CFO was and is crucial to prevent future findings in the Internal Control over the programs.

Finding No. 2023-02: Twenty-First Century Community Learning Centers Grant Claim Support (Federal Assistance # 84.287) Type of Finding: Significant Deficiency in Internal Control over Major Programs Criteria: Uniform Guidance indicates that that standards for documentation of personnel expenses are such that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: The Boys and Girls Club of Livingston County (the Organization) remits a variety of expense reimbursements to various agencies. We tested 26 bi-weekly timesheets and paystubs from 22 employees for the 12 month award period. We noted that for 3 employees the hours worked during the 12-month period were calculated incorrectly. This caused a net discrepancy of $1,274 of total wages during the 12- month award period. Cause: The Organization functions with a small number of office personnel therefore, the Organization is unable to have a review of the requested reimbursement performed. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Questioned Costs: None Repeat Finding: No Recommendation: We recommend the Organization implement a policy to have an employee review the requested reimbursements and corresponding receipts to ensure they agree. Management Response: The Boys & Girls Club IL Alliance that manages the grant for the local organization has created a new tool to assist in the accuracy of the submissions which have been provided since January 1st, 2024 and will eliminate most reimbursement discrepancies, BGCLC will utilize the tool and update the financial policies & procedures to further delineate the duties of the CEO, CFO and Accountant (CPA).

Finding No. 2023-003: Twenty-First Century Community Learning Centers Grant Claim Support (Federal Assistance # 84.287) Type of Finding: Significant Deficiency in Internal Control over Major Programs Criteria: Uniform Guidance indicates that that standards for documentation of personnel expenses are such that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: The Boys and Girls Club of Livingston County (the Organization) remits a variety of expense reimbursements to various agencies. We tested 26 bi-weekly timesheets and paystubs from 22 employees for the 12-month award period. We noted that for 5 employees the hourly rate during the 12-month period was incorrect. The Organization used the overtime rate instead of the base rate when calculating total wages. This caused a net discrepancy of $17,563 of total wages during the 12-month award period. We also noted that for one salaried employee the total wages for the 12-month period differed by $6,308. Cause: The Organization functions with a small number of office personnel therefore, the Organization is unable to have a review of the requested reimbursement performed. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Questioned Costs: None Repeat Finding: No Recommendation: We recommend the Organization implement a policy to have an employee review the requested reimbursements and corresponding receipts to ensure they agree. Management Response: As a small organization, with limited staffing, it was noted that the numbers were transposed when entered and the hourly rates were taken from the Payroll Report versus the paystub. Going forward with the CFO in place, all wages will be reported on-a-monthly basis utilized by the paystubs noting the wage rate changed. Noting that each grant has its own reporting requirements, the organization will provide a three-step verification that will include providing the CPA with the final verification of the monthly reports.

Finding No. 2023-004: Temporary Assistance for Needy Families Grant Claim Support (Federal Assistance # 93.558) Type of Finding: Significant Deficiency in Internal Control over Major Programs Criteria: Uniform Guidance indicates that that standards for documentation of personnel expenses are such that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: The Boys and Girls Club of Livingston County (the Organization) remits a variety of expense reimbursements to various agencies. We tested 13 bi-weekly timesheets and paystubs from 3 employees for the 6-month award period. The Organization incorrectly calculated the salary reimbursement for each month. This caused a net discrepancy of ($184) of total wages during the 6-month award period. Cause: The Organization functions with a small number of office personnel therefore, the Organization is unable to have a review of the requested reimbursement performed. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Questioned Costs: None Repeat Finding: No Recommendation: We recommend the Organization implement a policy to have an employee review the requested reimbursements and corresponding receipts to ensure they agree. Management Response: An increase of staff, a staff member and the CPA overview will be provided to ensure increased functionality for requested reimbursements and corresponding receipts verifying that each monthly reimbursement is balanced with the receipts and wages.

Finding No. 2023-005: Temporary Assistance for Needy Families Grant Claim Support (Federal Assistance # 93.558) Type of Finding: Significant Deficiency in Internal Control over Major Programs Criteria: Uniform Guidance indicates that that standards for documentation of personnel expenses are such that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: The Boys and Girls Club of Livingston County (the Organization) remits a variety of expense reimbursements to various agencies. We tested 8 bi-weekly timesheets and paystubs from one employee for the 4-month award period. The Organization incorrectly calculated the salary reimbursement for each month. This caused a net discrepancy of $99 of total wages during the 4-month award period. Cause: The Organization functions with a small number of office personnel therefore, the Organization is unable to have a review of the requested reimbursement performed. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Questioned Costs: None Repeat Finding: No Recommendation: We recommend the Organization implement a policy to have an employee review the requested reimbursements and corresponding receipts to ensure they agree. Management Response: The financial policies and procedures will be modified with the policy to include review of the submissions by the CEO and the CPA prior to submission of the grant reimbursement request, this will increase the ability to segregate the duties and provide more accurate reporting. Overall, with 2023 still coping with lack of employment pool coming off COVID, securing the CFO was and is crucial to prevent future findings in the Internal Control over the programs.

Finding No. 2023-02: Twenty-First Century Community Learning Centers Grant Claim Support (Federal Assistance # 84.287) Type of Finding: Significant Deficiency in Internal Control over Major Programs Criteria: Uniform Guidance indicates that that standards for documentation of personnel expenses are such that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: The Boys and Girls Club of Livingston County (the Organization) remits a variety of expense reimbursements to various agencies. We tested 26 bi-weekly timesheets and paystubs from 22 employees for the 12 month award period. We noted that for 3 employees the hours worked during the 12-month period were calculated incorrectly. This caused a net discrepancy of $1,274 of total wages during the 12- month award period. Cause: The Organization functions with a small number of office personnel therefore, the Organization is unable to have a review of the requested reimbursement performed. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Questioned Costs: None Repeat Finding: No Recommendation: We recommend the Organization implement a policy to have an employee review the requested reimbursements and corresponding receipts to ensure they agree. Management Response: The Boys & Girls Club IL Alliance that manages the grant for the local organization has created a new tool to assist in the accuracy of the submissions which have been provided since January 1st, 2024 and will eliminate most reimbursement discrepancies, BGCLC will utilize the tool and update the financial policies & procedures to further delineate the duties of the CEO, CFO and Accountant (CPA).

Finding No. 2023-003: Twenty-First Century Community Learning Centers Grant Claim Support (Federal Assistance # 84.287) Type of Finding: Significant Deficiency in Internal Control over Major Programs Criteria: Uniform Guidance indicates that that standards for documentation of personnel expenses are such that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: The Boys and Girls Club of Livingston County (the Organization) remits a variety of expense reimbursements to various agencies. We tested 26 bi-weekly timesheets and paystubs from 22 employees for the 12-month award period. We noted that for 5 employees the hourly rate during the 12-month period was incorrect. The Organization used the overtime rate instead of the base rate when calculating total wages. This caused a net discrepancy of $17,563 of total wages during the 12-month award period. We also noted that for one salaried employee the total wages for the 12-month period differed by $6,308. Cause: The Organization functions with a small number of office personnel therefore, the Organization is unable to have a review of the requested reimbursement performed. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Questioned Costs: None Repeat Finding: No Recommendation: We recommend the Organization implement a policy to have an employee review the requested reimbursements and corresponding receipts to ensure they agree. Management Response: As a small organization, with limited staffing, it was noted that the numbers were transposed when entered and the hourly rates were taken from the Payroll Report versus the paystub. Going forward with the CFO in place, all wages will be reported on-a-monthly basis utilized by the paystubs noting the wage rate changed. Noting that each grant has its own reporting requirements, the organization will provide a three-step verification that will include providing the CPA with the final verification of the monthly reports.